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Chapter-08 Producing Quality Goods and Services . Dr. Gehan Dhameeth , DBA. Nestle plans ahead for quality production . Nestle plans ahead for quality production . Produces all the products its own Focus is on the suppliers New Ohio production plant High quality production methods

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Chapter 08 producing quality goods and services

Chapter-08 Producing Quality Goods and Services

Dr. GehanDhameeth, DBA



Nestle plans ahead for quality production1
Nestle plans ahead for quality production

  • Produces all the products its own

  • Focus is on the suppliers

  • New Ohio production plant

    • High quality production methods

    • Sustainability under the guidelines of “Ohio Green House Council”



Learning objectives1
Learning Objectives

Explain the nature of production.

Outline how the conversion process transforms raw materials, labor, and other resources into finished products or services.

Describe how research and development lead to new products and services.

Discuss the components involved in planning the production process.

Explain how purchasing, inventory control, scheduling, and quality control affect production

Summarizes how productivity and technology are related



What is production1
What Is Production?

Operations management – all activities managers engage in to produce goods and services

Operations manager- responsible for conversion process

Planning- before, during, and after



Competition in the global marketplace1
Competition in the Global Marketplace

The U.S. was the most productive country after World War II

Competitors in European and Asian countries eventually recovered and began to compete with the U.S. firms

U.S. firms have had to refocus on quality and customer needs

The most successful U.S. firms have focused on:

Motivating employees to improve productivity

Reducing production costs by carefully selecting suppliers

Revamping their facilities with state-of-the-art equipment

Using computer-aided and flexible manufacturing systems

Improving control procedures to lower manufacturing costs (economies of scale)

Building foreign manufacturing facilities where labor costs are lower



Careers in operations management1
Careers in Operations Management

Operations managers must appreciate the manufacturing process

Mass and customized production processes

Successful operations managers must:

Be able to motivate and lead people

Understand how technology can make a manufacturer more productive and efficient

Appreciate the control processes that help lowerproduction cost and improve quality

Understand the relationship among customer, marketing, and production



The conversion process1
The Conversion Process

The purpose of the resources conversion process is to provide utility to customers

Utility- ability of the product to satisfy a human need

Four types of utility: form, place, time, and possession

Form utility: is created by people converting raw materials, finances, and information into finished products


The nature of conversion
The Nature of Conversion

Focus- the resource that makes most important input.

Magnitude of change- the degree to which the resources are physically changed. Here the original resources are totally unrecognizable in the finished product

Number of production processes- single or multiple production process based on number of products



The increasing importance of services1
The Increasing Importance of Services

%

%

%

Employees involvement in service industry over years in USA


The increasing importance of services2
The Increasing Importance of Services

Service economy

An economy in which more effort is devoted to services than to the production of goods

The production of services varies from the production of goods

Services are consumed immediately and cannot be stored

Services are provided when and where the customer desires

Services are usually labor intensive

Services are intangible, making it difficult to evaluate customer satisfaction



Where do new products and services come from1
Where Do New Products and Services Come From?

Research and Development

Basic research- to uncover new knowledge

Applied research- new knowledge with potential use

Customers

Competitors

Suppliers

Employees


Where do new products and services come from cont d
Where Do New Products and Services Come From? (cont’d)

Product extension and refinement

Product life cycle

Product refinement- new additions (black & white TV to color)

Product extension- new models (Gillette Zero)





New product development process1
New Product Development Process

  • Idea generation

  • Screening (market, production, and financial feasibility)

  • Concept development (prototype development)

  • Financial implications (break even, cost, GP, and NP)

  • Sample development

  • Sample testing (market research/ test marketing)

  • Production

  • Commercialization



Planning for production1
Planning for Production

Design planning

Product line

Product design

Capacity

Use of technology

Labor-intensive technology:

Capital-intensive technology:


Planning for production cont d
Planning for Production (cont’d)

Facilities planning and site selection

Factors influencing the location decision for a production facility

Human resources

Plant layout



Operational planning1
Operational Planning

Four steps in operational planning

Step 1: Selecting a planning horizon (time period for the plan)

Step 2: Estimating market demand

Step 3: Comparing market demand with capacity

Step 4: Adjusting products or services to meet demand



Operations control1
Operations Control

Purchasing

Inventory control

Types of inventory

Costs of inventory

Inventory control methods

Materials requirements planning (MRP)

Manufacturing resource planning (MRP II)

Enterprise resource planning (ERP)

Just-in-time inventory system


Operations control cont d
Operations Control (cont’d)

Scheduling (right place at the right time)

Quality control

Statistical process control (SPC)

Statistical quality control (SQC)

Inspection


Operations control cont d1
Operations Control (cont’d)

Quality control (cont’d)

Improving quality through employee participation

Total Quality Management (TQM)

Six Sigma (identify and remove causes of defects)

Quality circles

World quality standards: International Organization for Standardization (ISO)

ISO 9000

ISO 14000



Management of productivity and technology1
Management of Productivity and Technology

Productivity (average level of output per worker per hour)

Productivity trends



The impact of computers and robotics on production cont d
The Impact of Computers and Robotics on Production (cont’d)

Computer manufacturing systems

Computer-aided design (CAD)

Computer-aided manufacturing (CAM)

Computer-integrated manufacturing (CIM)



What we discussed today
What we discussed today.. remember in today’s discussion


Learning objectives2
Learning Objectives remember in today’s discussion

Explain the nature of production.

Outline how the conversion process transforms raw materials, labor, and other resources into finished products or services.

Describe how research and development lead to new products and services.

Discuss the components involved in planning the production process.

Explain how purchasing, inventory control, scheduling, and quality control affect production

Summarizes how productivity and technology are related


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